'Part-private' BNFL put back years

PART-privatisation of British Nuclear Fuels - perhaps the most controversial of all Government Public Private Partnerships - will not be re-attempted until 2006 at the earliest, the atomic generator and cleanup company' s chairman has predicted.

Hugh Collum, brought in three years ago with a brief to steer BNFL through to PPP, also confirmed that he will not be around to finish the job.

Collum, 61, whose initial preparation for PPP was derailed by the nuclear waste documentation scandal of 2000, has only been granted a two-year extension to his job.

Speaking as he unveiled a nuclear liabilities accounting-riddled loss of £2.3 billion for the year to March, including a £160 million operating loss from its ageing portfolio of nuclear reactors which still generate 5% of the country's electricity, Collum said the PPP will have to be delayed until after the next general election.

Trade and Industry Secretary Patricia Hewitt has talked of a PPP review in 2004-5.

Collum argued: 'Realistically, we are talking 2006, after an election and subject to us building a track record.' He said the timetable would be subject to BNFL avoiding 'any incidents', such as the 2000 fiasco.

While Collum definitely will not see BNFL through to PPP, it is unlikely chief executive Norman Askew, 59, will either. Collum said he will spend his final two years securing 'management successionî and embedding the wholesale restructuring of the group.

Reconstruction of BNFL has begun with Hewitt's go-ahead for a new quango, the Liabilities Management Authority, that will unburden BNFL of the £40 billion clean-up costs of its current nuclear assets.

After the creation of the LMA and the phasing out of the six remaining Magnox stations over the next eight years, BNFL will concentrate on its Westinghouse reactor design and build business and its Government services business, operating power stations on contract or decommissioning and cleaning them up and converting waste. BNFL's reprocessing site is at Sellafield in Cumbria.

Stripping out exceptional charges of £1.9m for historic waste liabilities and the £375m costs of writing down the value of the soon-to-be-closed, uneconomic Calder Hall and Chapelcross stations, BNFL reported operating profits of £22m. According to finance director John Edwards, ignoring the loss-making Magnox generation business, the operations that will form the future core of BNFL made profits of between £150 million and £200m.

'This has been a landmark year,î said Collum. 'We are putting in place a structure for a commercial and competitive BNFL.'

Key to BNFL's future is Energy Minister Brian Wilson' s Energy Review. BNFL hopes that will give it the green light to build a new generation of nuclear reactors on British Energy's power station sites.